On the political front, BJP's B S Yeddyurappa was sworn in as the chief minister of Karnataka, even as the Supreme Court made it clear that government formation would be subject to the final outcome of the case before it.

"Market traded in a negative bias despite gains in rupee while investors' focus is now shifting to earnings after the state election dilemma.

"Small and mid-caps outperformed...On the global front, US yield rose above 3 per cent mark, whereas oil remains at elevated levels which could dampen the flow of funds to EMs, especially to India were the valuation is comparatively high." said Vinod Nair, head of research, Geojit Financial Services.

Among sectoral indices, FMCG suffered the most by falling 0.90 per cent, followed by bankex 0.63 per cent, metal 0.59 per cent, power 0.14 per cent, teck 0.11 per cent and IT 0.10 per cent.

On the other hand, consumer durables rose 1.37 per cent, realty 0.41 per cent, infrastructure 0.28 per cent, capital goods 0.24 per cent and oil and gas 0.08 per cent.

In the Sensex pack, ITC emerged as the biggest loser, plunging 2.43 per cent largely on profit-booking after yesterday's rally, followed by Bharti Airtel at 2.34 per cent.

Shares of Tata Steel fell 1.93 per cent despite the company on Thursday reporting a consolidated net profit of Rs 14,688.02 crore for the March quarter.